A Guide to Your Third Stimulus Check
A Guide to Your Third Stimulus Check
By: Stacey Nickens
On March 11, President Joe Biden signed the American Rescue Plan Act of 2021. This act provides for a third round of stimulus to some American families; however, as the legislation took a while to make it’s way through both chambers of congress, you may be unfamiliar with the final iteration of the bill.
How much money can you expect to receive in this third round of stimulus? Each individual is eligible for a $1,400 stimulus check; however, you could be eligible for a larger stimulus check if you are married and/or care for dependents. A married filing jointly couple is eligible for $2,800 in stimulus ($1,400 in stimulus for each member of the couple). Taxpayers are also eligible for an additional $1,400 for each dependent in their care. For example, a couple with two children could receive up to $5,600 in stimulus payments.
Unlike with the previous two rounds of stimulus, you are eligible for an additional $1,400 in stimulus for anyone that you claim as a dependent on your return. This includes dependent children who are 17 or 18 years old as well as elderly parents. Accordingly, anyone who can be claimed as a dependent on someone else’s return will not receive their own stimulus payments. Instead, a dependent’s stimulus will be rolled into the payment sent to the taxpayer that claims them as a dependent.
If you are filing as single, your stimulus payments will begin being phased out if your adjusted gross income (AGI) exceeds $75,000. Individuals filing as single will no longer be eligible for stimulus once their AGI exceeds $80,000. If you are married and filing jointly, your stimulus payments will begin being phased out if your joint AGI exceeds $150,000. Couples filing jointly will no longer be eligible for stimulus once their joint AGI exceeds $160,000.
Your third stimulus check will either be based on your 2019 income or your 2020 income, depending on when you file your 2020 return. Click here to read more about how the timing of your 2020 return could impact your stimulus payment.
Will you owe taxes on your third stimulus check? No. As was the case before, your stimulus payment is treated as a Recovery Rebate tax credit and will not impact your taxable income. If you do not receive as much stimulus as you believe you are owed, you can claim the remaining amount on your 2021 return.
When will you receive your third stimulus payment? The IRS began sending out checks on the weekend of March 13-14. If you recently paid taxes or received a refund using a bank account, you can likely expect your stimulus payment via direct deposit into that bank account. (If this is the case for you, you may see a “pending” or “provisional” payment in your account until the official payment date of March 17.) If the IRS does not have your bank account information on file, you can expect a paper check. Because we are also in the middle of tax season, you may experience some delays in receiving your stimulus. You can use the “Get My Payment” tool on the IRS website to track the status of your third stimulus payment.
The IRS will also eventually send out a notice, detailing the amount of your third stimulus payment. You should keep this notice for your tax records, as you will need to calculate your Recovery Rebate tax credit on your 2021 return.
What if my child was born in 2021? Because you didn’t claim your new baby as a dependent on your 2019 or 2020 returns, you won’t receive stimulus for this dependent. However, you can still claim the missed $1,400 Recovery Rebate credit on your 2021 return.
